Sometimes people wish to own homes in untraditional ways. Adult children might wish to buy a home for their parents to live in. Unmarried adults may own a home together. Married couples with children from prior marriages may want to assure each other as to what will happen to a home on death.
Handling these non-traditional types of ownership is not always easy. Although there are usually some choices, a land trust may be the answer. A land trust is a particular type of trust, in which a trustee owns the real property and the beneficiary owns the beneficial ownership. A land trust consists of a deed transferring title to the trustee and containing all the powers and an unrecorded land trust agreement, which is the only place that the identity of the beneficiary appears.
As with a regular revocable trust, one can name contingent beneficiaries, impose restrictions, and be creative with the beneficial ownership. The Florida statute on land trusts was amended last year to clarify that one can obtain the homestead tax exemption. We would not normally place exempt homestead into a land trust for asset protection purposes, because the constitutional protection of homestead property is a stronger protection. But we may use a land trust for homestead when there are other reasons. There are also choices as to who is trustee, whether an individual or an entity.
Although land trusts have been around for many years, many attorneys, title companies, insurance companies and lenders are either unfamiliar with them or concerned about how they could affect title, or a loan or insurability. Thus, one should consider the entire situation including possible issues before placing property into a land trust.